Australia weekly consumer confidence sharply falls to 3.8 pct, offsetting previous gains

Australia’s weekly consumer confidence witnessed a sharp fall last week, largely offsetting the gains over the previous two weeks, widely due to a sizeable decline in households’ perceptions of the economic outlook driving the deterioration in sentiment.

ANZ-Roy Morgan Australian consumer confidence fell a sharp 3.8 percent last week. After two consecutive weeks of improvement, consumers’ views towards current and future economic conditions dipped, down 8.1 percent and 7.2 percent respectively. The average of these two measures – households’ confidence in the economic outlook – is at its lowest level in 16 weeks.

Households’ views towards current financial conditions slipped 0.3 percent last week. Partially offsetting this weakness, sentiment around future financial conditions rose a solid 3.7 percent. Looking through the weekly volatility, confidence in overall financial conditions has remained broadly unchanged over the past two months, hovering around its long term average.

Consistent with the fall in views towards economic conditions, the ‘time to buy a major household item’ index dipped 7.6 percent last week, down to the lowest level in almost two years. Inflation expectations were unchanged at 4.4 percent on a four-week moving average basis.

"Looking forward, we expect labor market conditions to continue improving given the strength in job ads and business conditions. This should broadly support consumer confidence, although we are unlikely to see a material increase until wages growth starts to pick up more meaningfully," said David Plank, Head of Australian Economics, ANZ Research.

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